Additional Thoughts
Short puts will be a very common strategy for us. Due to the fact that most investors carry their risk to the downside, puts are often used as insurance for long stock positions. This high demand tends to boost put prices quite a bit. They have a high probability of success, a low to moderate capital requirement, and serve as an excellent alternative to long shares. The fact that their risk is naturally defined by the price of the underlying makes them a particularly attractive strategy, especially for smaller accounts.
I like to think of short puts as a way to get paid for buying long shares. Instead of buying shares at the current market price, you can sell a short put at a strike lower than current market value. If the option expires while the share price is below the strike, you will buy the shares at the strike price (lower than the original market value). Additionally, you will get to keep the credit you received for selling the put in the first place. If the share price does not expire below your strike, you won't receive shares, but you'll still keep the credit you received as profit!
Short puts are a very powerful strategy, and an important concept to master.